Economics • Banking & FinanceHard
What is the principal mandate of the 'Depositor Education and Awareness (DEA) Fund' maintained by the Reserve Bank of India?
A. To credit the amounts of unclaimed deposits remaining inactive in banks for ten years or more, utilizing funds for depositor awareness programs.✓ Correct Answer
B. To provide deposit insurance up to 5 lakh rupees for failed commercial banks.
C. To subsidize interest rates for agricultural loans disbursed by rural cooperative banks.
D. To bail out systemic non-banking financial companies facing severe liquidity crises.
💡 Solution & Explanation
Under Section 26A of the Banking Regulation Act, 1949, commercial banks must transfer all unclaimed balances that have remained inactive for ten years or more to the Depositor Education and Awareness Fund. This fund is administered by the Reserve Bank of India and is utilized primarily for promoting depositor awareness and other related activities specified by the central bank. Incorrect options mention unrelated mandates such as deposit insurance limits managed by DICGC or agricultural loan subsidies. This fund is crucial for protecting long-forgotten customer assets.
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